Hi, three days ago, the PF inspector visited our factory to conduct an audit for the financial year 2010-11. We disburse salaries and overtime on the 7th of each month. The inspector requested a breakdown of the total salary and overtime amounts on a monthly basis for the entire year. The total overtime amount for the year was 240,000 rupees, of which he mentioned that EPF contributions on overtime amounting to 61,464 rupees needed to be submitted.
EPF Deductions on Overtime
My query pertains to whether the overtime amount is subject to EPF deductions. I have heard that if overtime is included in the salary sheet, EPF contributions need to be made on the overtime amount. However, if overtime is listed separately, EPF deductions are not required.
Please advise on the best course of action as it seems we may be required to pay a higher amount.
Thank you.
From India, Delhi
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5EPF Deductions on Overtime
My query pertains to whether the overtime amount is subject to EPF deductions. I have heard that if overtime is included in the salary sheet, EPF contributions need to be made on the overtime amount. However, if overtime is listed separately, EPF deductions are not required.
Please advise on the best course of action as it seems we may be required to pay a higher amount.
Thank you.
From India, Delhi
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We need not pay Pf on the overtime wages whether it is shown in the wage register or not. But for ESI we have to pay for overtime.
From India, Kochi
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From India, Kochi
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Hi, Since overtime is not a regular payment hence PF is not applicable on the amount paid in overtime
From India, Khopoli
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From India, Khopoli
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No need to pay PF on overtime amount as PF amount not covered under EPF whether it is shown on wage sheet or separately.
From India
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From India
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in our company we pay overtime in cash, dont show overtime in salary sheet. we dont pay pf on it Dhrumin soni
From India, Mumbai
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From India, Mumbai
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Over time wages is not comes a basic + DA amount. In case you are paying under basic and DA you need to pay the PF for that amount. Arjun
From India, Secunderabad
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From India, Secunderabad
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hello dear There is no need to pay P F on overtime but ESI is payable. Doesn’t meter you sow overtime in your salary register or not.
From India, Shimla
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From India, Shimla
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No need to pay PF on OT amount , the only reason that if you are split the OT amount Basic + DA, IInd if your basic salary is less then current minimum wages , regards Rajvir 9478323770
From India, Chandigarh
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From India, Chandigarh
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Dear All, Contribution on OT not applicable as definition of wages under PF ACT. R S Singh 9810117040
From India, Delhi
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From India, Delhi
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Dear All, Section 2(b) of PF Act clerifies thar overtime is not included in the basic wages,hence PF is not applicable on the same. Regards Ramesh Bhardwaj
From India, New Delhi
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From India, New Delhi
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EPF Contributions on Overtime: Clarification Needed
Before 3 days, a PF inspector came to our factory and conducted an audit for 2010-11. We pay salary and overtime on the salary day (7th of each month). The inspector asked me to make a list of the total salary and overtime amount month-wise for a year. The total overtime amount was 240,000. He mentioned that we have to submit EPF on the overtime amount, which is 61,464.00.
My question is, does the overtime amount fall under EPF? I heard that if we include overtime in the salary sheet, then we have to pay EPF on the OT amount, but if we show overtime separately, then we don't need to pay.
Please advise as we may have to pay more amount.
Clarification on OT PF Regulations
Dear PF inspector, you inquired about the OT PF, which is within your rights as an inspector conducting an inspection under the Factory Act 1948, Section 64 (Power to make rules), Subsection 4. According to this, we can take OT from a worker for 50 hours in a quarter. If you exceed the permitted OT hours, you are liable to pay PF on the excess amount. Otherwise, you are not liable to pay PF on OT.
Regards.
From India
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Before 3 days, a PF inspector came to our factory and conducted an audit for 2010-11. We pay salary and overtime on the salary day (7th of each month). The inspector asked me to make a list of the total salary and overtime amount month-wise for a year. The total overtime amount was 240,000. He mentioned that we have to submit EPF on the overtime amount, which is 61,464.00.
My question is, does the overtime amount fall under EPF? I heard that if we include overtime in the salary sheet, then we have to pay EPF on the OT amount, but if we show overtime separately, then we don't need to pay.
Please advise as we may have to pay more amount.
Clarification on OT PF Regulations
Dear PF inspector, you inquired about the OT PF, which is within your rights as an inspector conducting an inspection under the Factory Act 1948, Section 64 (Power to make rules), Subsection 4. According to this, we can take OT from a worker for 50 hours in a quarter. If you exceed the permitted OT hours, you are liable to pay PF on the excess amount. Otherwise, you are not liable to pay PF on OT.
Regards.
From India
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EPF Contributions on Overtime Wages
No need to pay EPF on OT wages as per the Act. If he demands to pay, then request him to give it in writing. No officer will give it in writing, but be careful about the double wages rule for OT as per your records.
Thanks,
Senthil
From India, Madras
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No need to pay EPF on OT wages as per the Act. If he demands to pay, then request him to give it in writing. No officer will give it in writing, but be careful about the double wages rule for OT as per your records.
Thanks,
Senthil
From India, Madras
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Hi pf deduction is not required on over time wages already employer may pay double amount to the employee under ots. Again not reuired to deduct and remit the pf contributions. Khs
From India, Hyderabad
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From India, Hyderabad
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Mr. Sunil I herewith attached the explanation about wages in PF act, Kindly go through that u will get clear idea about the basic wage and PF contribution. Regards Sudharshanan
From India, Madras
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From India, Madras
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Pf wages is basic , da , retainer ship and food value of connection other than this nothing to attract for pf contribution . Ot only attract for esi contribution. S s rawat
From India, Jhajjar
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From India, Jhajjar
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Hi, As per PF act PF is not applicable in Overtime, even government release some Official gazzette on it, you can search it.
From India, Jabalpur
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From India, Jabalpur
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Dear Rawat Sir,
Request you to please explain why and how OT attracts ESI contribution. Since OT is not a regular pay for an employee, there may be times when he will exceed the limit for some time and then fall back. It is mentioned on the ESIC website under FAQs. Please refer and suggest.
Regards
From India, Khopoli
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Request you to please explain why and how OT attracts ESI contribution. Since OT is not a regular pay for an employee, there may be times when he will exceed the limit for some time and then fall back. It is mentioned on the ESIC website under FAQs. Please refer and suggest.
Regards
From India, Khopoli
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Definition of 'Basic Wages' Under EPF & MP Act, 1952
The definition of 'Basic Wages' has been defined under Section 2(b) of the EPF & MP Act, 1952 as below:
Section 2(b) "basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include:
- the cash value of any food concession;
- any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;
- any presents made by the employer.
So, it's pretty evident that overtime is not included whether shown in the salary sheet or not.
Further, refer to the link given below with detailed case laws:
http://www.epfochennai.tn.nic.in/pdf/RO_basicwages.pdf
Hope it serves your purpose.
Thanks & Regards,
Harshal Jain
Assistant Manager (HR)
From India, Asansol
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The definition of 'Basic Wages' has been defined under Section 2(b) of the EPF & MP Act, 1952 as below:
Section 2(b) "basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include:
- the cash value of any food concession;
- any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;
- any presents made by the employer.
So, it's pretty evident that overtime is not included whether shown in the salary sheet or not.
Further, refer to the link given below with detailed case laws:
http://www.epfochennai.tn.nic.in/pdf/RO_basicwages.pdf
Hope it serves your purpose.
Thanks & Regards,
Harshal Jain
Assistant Manager (HR)
From India, Asansol
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EPFS 1952, Section 29: Contribution Details
(1) The contributions payable by the employer under the scheme shall be at the rate of ten percent of the basic wages, dearness allowance (including the cash value of any food concessions), and retaining allowance (if any) payable to each employee to whom the Scheme applies:
Provided that the above rate of contribution shall be twelve percent in respect of any establishment or class of establishment which the Central Government may specify in the Official Gazette from time to time under the first proviso to sub-section (1) of Section 6 of the act.
(2) The contribution payable by the employee under the Scheme shall be equal to the contribution payable by the employer in respect of such employee:
Provided that in respect of any employee to whom the scheme applies, the contribution payable by him may, if he so desires, be an amount exceeding 10% or 12%, as the case may be, of his basic wages, dearness allowance, and retaining allowance (if any) subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under the Act.
(3) The contribution shall be calculated on the basis of the basic wages, dearness allowance (including the cash value of any food concession), and retaining allowance (if any) actually drawn during the whole month whether paid on a daily, weekly, fortnightly, or monthly basis.
(4) Each contribution shall be calculated to the nearest rupee, 50 paise or more to be counted as the next higher rupee and a fraction of a rupee less than 50 paise to be ignored.
Regards
From India, Kolkata
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(1) The contributions payable by the employer under the scheme shall be at the rate of ten percent of the basic wages, dearness allowance (including the cash value of any food concessions), and retaining allowance (if any) payable to each employee to whom the Scheme applies:
Provided that the above rate of contribution shall be twelve percent in respect of any establishment or class of establishment which the Central Government may specify in the Official Gazette from time to time under the first proviso to sub-section (1) of Section 6 of the act.
(2) The contribution payable by the employee under the Scheme shall be equal to the contribution payable by the employer in respect of such employee:
Provided that in respect of any employee to whom the scheme applies, the contribution payable by him may, if he so desires, be an amount exceeding 10% or 12%, as the case may be, of his basic wages, dearness allowance, and retaining allowance (if any) subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under the Act.
(3) The contribution shall be calculated on the basis of the basic wages, dearness allowance (including the cash value of any food concession), and retaining allowance (if any) actually drawn during the whole month whether paid on a daily, weekly, fortnightly, or monthly basis.
(4) Each contribution shall be calculated to the nearest rupee, 50 paise or more to be counted as the next higher rupee and a fraction of a rupee less than 50 paise to be ignored.
Regards
From India, Kolkata
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